If you regularly ship products to customers, you know that you pay your preferred carrier for delivering your packages. What you may not be aware of are some of the preventable fees that also appear on your bill. UPS is our preferred carrier, so we will use them as an example for this article, however other shippers have similar charges and fees.
You may be letting some of your profit slip through the cracks if you aren’t familiar with the ways to prevent unnecessary charges. We wanted to bring this important topic to your attention before your high volume shipping season arrives.
For example, did you know that there is an Address Correction fee associated with packages that have an incorrect address – regardless of whether the package was delivered to the right place or not? UPS and FedEx assess this fee on the shipper – even if the actual shipping is being billed to the receiver! As of this writing, the Address Correction fee for UPS is $13.00. That’s a big hit if you are shipping items that don’t have a lot of profit built into them.
As e-commerce sellers know, most of the address errors will be made by the customer. Sometimes they transpose digits in their street address, or use Ave instead of Blvd, or give the wrong zip code. If it is a business, they don’t live at their place of work, so they just don’t have the address memorized. Utilizing the UPS address verification for every shipment is a good way to catch most of these types of errors. If you aren’t familiar with UPS Address Validation, it is accessed via a checkbox when shipping via the ups.com website:
Or, if you are using UPS WorldShip, you can find “Validate Ship to Address” under the Addresses menu – alternatively, if you like to use the keyboard, the “F8” key will perform the validation as well.
If the Address isn’t found to be valid, a popup will alert you to that fact. In the example below, the customer entered the ship to address as a “Street” and made a typo on the zip code. UPS shows the correction – changing “ST” to “DR” and correcting the zip code. If you know that is correct, just accept the changes. If you aren’t sure, you can use Google Maps for business customers or call the customer to verify.
If the address is validated, you will see a pop like the one below:
Using UPS Validation can save you hundreds of dollars over the course of a year. It’s quick and easy and a really good return on your investment of time.
However Address Corrections are only one of the charges that you may see on your shipping bill. Shipments delivered to home addresses are assessed a surcharge of $3.15-$3.70 per shipment. UPS Validation will also classify the shipping address as a residence or business and show you the actual shipping rate including the surcharge. If the majority of your customers are shipping to their residence shipping rate including the surcharge. If the majority of your customers are shipping to their residence, make sure that you are taking that into consideration when you set your shipping rates.
Admittedly, the UPS WorldShip address verification system could do a better job at catching some of these errors and helping to reduce your freight cost. But using this tool can help catch the low hanging fruit.
Another thing you can do to increase profits by lowering your shipping costs is entering the dimensions of each shipping box into UPS WorldShip or UPS.com. In 2015, both UPS and FedEx started applying Dimensional Weights to all packages. Dimensional Weight is a calculation of a theoretical weight of a package. This means that the cost for shipping a box is determined more by the dimensions of the box than by its weight – up to a point of course.
And make sure you don’t just look at the bottom of the box to get its dimensions – UPS uses highly calibrated lasers to measure the outside dimensions of the box. Most boxes have the inside dimensions stamped on the bottom of the box. We’ve discovered that due to packing paper, etc. our boxes scan about 1 inch higher than the dimensions stamped on the box. And to give UPS credit, when we have entered dimensions higher than were scanned by the lasers, they have credited us back those charges.
So by entering the box dimensions into UPS WorldShip for each package you send, UPS will display the true dimensional cost. Thus allowing you to make sure your shipping rates take dimensional weights into account.
Obviously, there is so much more to shipping than we have covered here, but we hope this is a start for you to begin diving down and really looking at your shipping procedures and rates to lower your overall shipping costs and increase profits. To sum up what we’ve talked about in this article, here is a list of things you can do to minimize your shipping costs this season.
- Audit your shipping invoice – especially the Adjustments section. This is where you’ll discover wrong addresses and dimensional weight charges.
- If you see an Adjustment Charge on your bill (like an address correction), make sure to update the customer information in your systems so that it won’t happen next time.
- Use UPS Validation – if the address validates, you should be covered. UPS does reserve the right to charge an address correction fee even if the address validates, but this one step cuts down on 99% of the issues.
- If the address doesn’t pass validation, use Google to try to figure out if the customer made a silly mistake like not using ST, RD, BLVD, AVE or if they might have moved.
- Set Exception notifications. Make sure to setup notifications for delivery exceptions not just delivery notifications. This way you can be alerted to potential issues and get ahead of a situation where the package won’t be delivered on time.
- Measure the outside of your box and enter those dimensions when shipping to get the true dimensional costs.